Bayfield Energy lost a fifth of its value in morning trading on Monday after admitting that production at the Trintes field in the first quarter was constrained by a number of operational and technical factors.
These included a catch-up on a backlog of essential maintenance work as well as the suspension of the programme of new development wells designed to ramp up production for a three week period, following a series of recurring issues with one of the rigs.
The company opted to switch to "open hole" drilling which allowed it to complete two long sidetrack wells, one of which is currently producing around 350 barrels of oil per day (bopd) and the other 200 bopd.
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Elsewhere, there was more bad news with three reservoirs at the EG7 site found to be predominantly water bearing and just one was found to be oil bearing. These results reduce the company's contingent resources volumes assigned to the EG1 structure, reducing it by 5.9m barrels from a net 24.67m barrels.
Furthermore, the P Sand section of EG1 has been proven to be water bearing and therefore is no longer recognised with the EG1 resource.
In better news, the company has signed a memorandum of understanding of the block adjacent to the EG8 discovery with Repsol E&P which will see the companies establish a joint technical team for the potential accelerated development of the accumulations of oil and gas identified by EG8. This, the company said, could ultimately lead to a reclassification of prospective and contingent resources.
In a statement the company said: "Bayfield has taken steps to provide greater operational and financial flexibility concerning the timing of fulfilment of its committed seven-well drilling programme. Firstly, it has agreed amendments to the Galeota licence and farm-out agreement with Petrotrin, to extend the period in which it was obligated to drill the seven wells out to the end of March 2015.
"Secondly, it is close to concluding negotiations concerning an assignment of the rig contract which would allow for a break in the drilling programme, but ensure that Gorilla III was available to complete Bayfield's commitments in 2013. Thirdly, it is reviewing, with its advisers, alternatives for raising additional finance in the near-term."
The share price fell 19.78% to 36p by 12:42.
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